Demand for modern retail to stimulate sector growth – FoodCo CEO

Recovering consumer demand has been identified as a key factor to unlocking growth in the retail sector as the Nigerian economy makes a gradual recovery from the disruptions of the COVID-19 pandemic.

According to Ade Sun-Basorun, Chief Executive Officer, FoodCo Nigeria Limited, consumer appreciation for modern retail will remain strong into the new era given some of its benefits ranging from providing access to a wide range of quality and affordable products, quality assurance, hygienic conditions, the ambience and unique shopping experience that enhances social bonding.

Speaking on the theme: ‘Nigeria’s Consumer Markets: Ready for a recovery?’ During a webinar organised by the South Africa-Nigeria Business Chamber recently, Sun-Basorun said: “Formal retail penetration remains low at a paltry 0.12 stores per 1 million citizens. This is even lower than in Kenya and South Africa which boast 1.34 and 19.27 stores per one million citizens respectively. However, a recent forecast from McKinsey projects that Nigeria’s household consumption growth will rise by $96bn from 2020 to 2025.

“What this translates to is that there is a huge spectrum of unmet needs in Nigeria’s retail sector that will create opportunities not only for modern retail operators but also for the manufacturing sector as well as Micro, Small and Medium Enterprises.

“The good thing is that we are already seeing interesting shifts in the sector which strongly indicate that operators are making the necessary adjustments to meet the rising demand for modern retail services in the country. For instance, there is a growing number of semi-formal operators who are blending formal and informal retail services to meet customer needs.

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“These operators are not only making modern retail more accessible but are also pushing its boundaries. Additionally, we have seen an increase in investments in strip malls and neighbourhood stores which is a deviation from the typical Grade A type mall development,” he added.

Stressing the critical role of technology and innovation in driving customer satisfaction within the segment, Sun-Basorun argued that operators should adopt long-term thinking that embraces the desires of the Millennials and Generation Z if they want to remain relevant into the future.

He stated: “As we work hard at entrenching formal retail in the present, we must not forget to build structures that will accommodate the coming shifts in consumer patterns. Nigeria has a young population with a significant number within the Millennials and Gen Z categories. These demographics have a different outlook to what we are typically used to so the challenge is in finding the balance between serving the consumers of today and ensuring that the sector is resilient and ready for those coming tomorrow.”

Established in 1982, FoodCo is a diversified consumer goods company with interests in retail, quick service restaurants, manufacturing and entertainment. The company operates the largest supermarket chain brand in south-west Nigeria, outside Lagos; and boasts an extensive branch network covering Ibadan, Lagos and Abeokuta.